BEIJING China will impose a long-awaited fuel tax "very soon," the head of National Development and Reform Commission's (NDRC) Energy Research Institute said in comments reported on Tuesday by the China Daily.
"The announcement will come very soon, and actually specific plans have already been suggested to the government long ago," Han Wenke, director general of the research body, was quoted as saying.
More than a decade in the works, the fuel tax -- experts expect 25 percent or more will be heaped upon retail pump prices -- is meant to replace road tolls as a means to fund highway construction.
Beijing had held back on imposing the tax due to previous concerns about rising inflation, high and volatile oil prices, and a definitive fuel pricing scheme, officials had said.
China's state-regulated fuel prices were below international pump prices for years, but the slump in crude oil prices in the last few months has made China's retail prices comparatively high, giving the government a window of opportunity to cut prices and introduce a fuel tax without upsetting motorists.
Crude oil has fallen below $55 a barrel this week, more than 60 percent below the peak of $147 hit in July.
In a later online update of the news report, China Daily removed Han's direct quote about an announcement being expected "very soon," instead only quoting him as saying that the dip in oil prices presented an opportunity to levy the tax.
"The government has repeatedly said that it is looking for an appropriate time to start levying (the) fuel tax, and now, with the global oil prices going down so much over the past few months, I think this is a great time to impose the tax," he said.
The tax would be slightly above 1 yuan ($0.147) a liter and January, or earlier, would be a good time to roll out the change, Jiang Kejun, a NDRC Energy Research Institute member involved in formulating the fuel tax scheme, told the newspaper.
He said the government would likely cut retail pump prices before introducing the tax.
Amid growing expectation of an imminent official announcement, the China Securities News cited a China International Capital Corp analyst as saying late on Tuesday that fuel prices would be cut "around" this Thursday.
The unnamed source said gasoline pump prices may be lowered by 1,000-1,500 yuan a tonne and diesel rates by 800-1,200 yuan a tonne, representing cuts of 12-20 percent, and added that further price cuts were possible.
(Reporting by Chua Baizhen, additional reporting by Beijing newsroom; Editing by Ken Wills)